SK hynix Halts Solidigm U.S. IPO Review, Responding to Shareholder Concerns

SK hynix has decided to abandon its review of Solidigm's potential U.S. initial public offering (IPO) amid volatile market conditions and concerns over shareholder dilution, according to a regulatory disclosure on October 23. The company will also halt its review of pre-IPO fundraising options. The move is seen as a response to worries that a separate U.S. listing could weaken the position of existing SK hynix shareholders.

Solidigm, a U.S.-based NAND flash subsidiary acquired by SK hynix from Intel in 2021, was established under a U.S.-based intermediate holding company. The potential listing had drawn criticism due to the risk of a valuation discount from dual listings and financial scrutiny over its compliance with dual-listing guidelines. Financial authorities, including the Financial Supervisory Service (FSS) Governor Lee Chan-jin and Financial Services Commission (FSC) Chairman Lee Eog-weon, expressed concerns about the proposed listing's impact on financial market stability.

Despite the decision, demand for enterprise solid-state drives (SSDs) remains strong due to the growth of artificial intelligence (AI), making additional production capacity a priority. SK hynix still seeks to raise capital for Solidigm's U.S. expansion but will explore alternative options and financing methods to achieve this objective.